Poverty during the Covid-19 crisis


This report from UK think tank the Legatum Institute looks at the likely impacts of Covid-19 on poverty and the insulating effect of Government policy.

Original analysis from the Legatum Institute using the Social Metrics Commission’s approach to poverty measurement demonstrates both the likely impacts of Covid-19 on poverty and the insulating effect that Government policy has had. The survey data that underpins the measurement of poverty in the UK and covers the pandemic period will not be available until 2022. This is obviously too late for decision makers who are seeking to ensure that the most vulnerable are shielded from the worst impacts of the pandemic. To fill the gap, this briefing presents the results of a ‘nowcasting’ exercise using the most up-to-date data on employment, earnings, and Government policy available, along with a range of assumptions, to model the likely level and distribution of poverty in both Summer and Winter 2020. The original analysis uses the Social Metrics Commission’s approach to poverty measurement and is our best assessment of the likely course of poverty since the start of the crisis, the protective impact of Government action that has already been taken, and choices that still need to be made. It is no surprise that the economic fallout from the Covid-19 pandemic has increased poverty in the UK. However, the strength of reaction from the Government has insulated hundreds of thousands of people from poverty. This shows that, with the right tools and the right information, Government can ensure that, at a time of crisis, many of those who are vulnerable to poverty are protected. To ensure this continues as we begin to adapt to life after, or living with Covid-19, there is a clear need for the Government to push ahead with its creation of Experimental Poverty Statistics and to place a comprehensive anti-poverty strategy at the heart of its Covid-19-recovery response.

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